June 17, 2008

 

CBOT Soy Review on Monday: Slides on profit-taking, technical selling

 

 

Chicago Board of Trade soybean futures sank Monday on profit-taking and technical selling.

 

There were ideas that some concerns about Midwest flooding may have been factored into the market after rallies last week, an analyst said. However, the potential for serious yield and acreage losses remains supportive, particularly for the new crop, he said.

 

Chicago Board of Trade July soybeans closed down 26 cents at US$15.34 per bushel, and November fell 8 cents to US$15.23. July soymeal closed down US$3.40 at US$405.80 per short tonne, and July soyoil finished down 54 points at 65.65 cents per pound.

 

The soy complex retreated after a surge at the opening of trading on ongoing worries about excessive wetness in the Midwest. However, there was little follow-through buying and soybeans soon moved lower.

 

Technical selling and profit-taking came in after nearby July soybeans were unable to reach the contract high of US$15.96. The contract's session high was US$15.93.

 

Forecasts for drier weather in the coming week applied some pressure to the market, an analyst said. Most of the Midwest will get a break from recent ongoing rain, as a trough boundary keeps most thunderstorm activity in the southern and western sections of the central U.S. for at least the first part of the week, according to DTN Meteorlogix.

 

But any drying of soil will be minimal after heavy rains, Meteorlogix said. Parts of central and eastern Iowa, the top soy-growing state, have seen nearly two feet of rain since the start of April, or about 250% of normal, according to Cropcast Agricultural Weather.

 

"We've already factored in a lot of the damage," a market analyst said. "This week, the weather looks favorable."

 

A weakening in crude oil added pressure to the soy complex, traders said. Commodity funds sold an estimated 3,000 contracts at the CBOT.

 

 

SOY PRODUCTS

 

Technical selling and profit-taking pressured CBOT soy products, traders said. The weakening in crude oil added pressure to soyoil.

 

The setback in soymeal, meanwhile, added pressure to soybeans, said Brian Hoops, president of Midwest Market Solutions. The markets saw "a break in the meal translate into a break in the soybeans and a lot of bear spreading," he said.